Bold actions needed to scale up SDG investment and reform global financial system
UNITED NATIONS, 9 April 2024 – A new UN report today says financing challenges are at the heart of the world’s sustainable development crisis – as
staggering debt burdens and sky-high borrowing costs prevent developing countries from responding to the confluence of
crises they face. Only a massive surge of financing, and a reform of the international financial architecture can rescue the Sustainable Development Goals.
The 2024 Financing for Sustainable Development Report: Financing for Development at a Crossroads (FSDR 2024) says urgent steps are needed to mobilise financing at scale to close the development financing gap, now estimated at
USD 4.2 trillion annually, up from USD 2.5 trillion before the COVID-19 pandemic. Meanwhile, rising geopolitical
tensions, climate disasters and a global cost-of-living crisis have hit billions of people, battering progress on
healthcare, education, and other development targets.
“This report is yet another proof of how far we still need to go and how fast we need to act to achieve the 2030 Agenda
for Sustainable Development,” said UN Deputy Secretary-General Amina J. Mohammed. “We are truly at a crossroads and time
is running out. Leaders must go beyond mere rhetoric and deliver on their promises. Without adequate financing, the 2030
targets cannot be met.”
With only six years remaining to achieve the SDGs, hard-won development gains are being reversed, particularly in the
poorest countries. If current trends continue, the UN estimates that almost 600 million people will continue to live in
extreme poverty in 2030 and beyond, more than half of them women.
“We’re experiencing a sustainable development crisis, to which inequalities, inflation, debt, conflicts and climate
disasters have all contributed,” said UN Under-Secretary-General for Economic and Social Affairs Li Junhua. “Resources
are needed to address this, and the money is there. Billions of dollars are lost annually from tax avoidance and
evasion, and fossil fuel subsidies are in the trillions. Globally, there is no shortage of money; rather, a shortage of
will and commitment.”
According to the report debt burdens and rising borrowing costs are large contributors to the crisis. Estimates are that
in the least developed countries debt service will be USD 40 billion annually between 2023 and 2025, up more than 50 per
cent from USD 26 billion in 2022. Stronger and more frequent climate related disasters account for more than half of the
debt upsurge in vulnerable countries. The poorest countries now spend 12 per cent of their revenues on interest payments
-- four times more than they spent a decade ago. Roughly 40 per cent of the global population live in countries where
governments spend more on interest payments than on education or health.
While investment in SDG sectors had grown steadily in the early 2000s, major sources of development funding are now
slowing down. For example, domestic revenue growth has stalled since 2010, especially in LDCs and other low-income
countries, in part due to tax evasion and avoidance. Corporate income tax rates are falling, with global average tax
rates down from 28.2 per cent in 2000 to 21.1 per cent in 2023, due to globalization and tax competition.
Meanwhile, Official Development Assistance from OECD countries and climate finance commitments are not being met. While
ODA increased to an all-time high in 2022, reaching USD 211 billion, from USD 185.9 billion in 2021, much of the growth
came from aid to refugees living in donor countries, and the total amount is inadequate for development. Only four
countries met the UN aid target of 0.7 per cent of GNI in 2022.
The report concludes that the international financial system, which was set up at the 1944 Bretton Woods Conference, is
no longer fit for purpose. It proposes a new coherent system that is better equipped to respond to crises, scales up
investment in the SDGs especially through stronger multilateral development banks, and improves the global safety net
for all countries.
The report points to the UN Summit of the Future in September 2024 as a crucial opportunity to change course. It highlights the June 2025 Fourth International Conference on Financing for Development (FfD4) as the critical moment for countries to commit to closing the development financing gap and invest in achieving the
SDGs.
FfD4 is an opportunity for countries to:Close credibility gaps and rebuild trust in multilateralism.Close financing and investment gaps, at scale and with urgency.Reform and modernize the outdated international financial architecture and adjust international rules for trade,
investment and finance.Formulate and finance new development pathways to deliver on the SDGs and ensure no one is left behind.
“Without global cooperation, targeted financing, and, crucially, the political will, the world will not achieve the
SDGs,” said Deputy Secretary-General Mohammed. “The clock is ticking. Between now and next year’s FfD4 Conference, we
have a once-in-80-year opportunity to comprehensively reform the financial architecture, and a last chance to correct
course before 2030. History will not be kind to those with the power to act who fail to do so, while the clock winds
down on the planet and its people.
Notes:The 2024 Financing for Sustainable Development Report: Financing for Development at a Crossroads is a joint product of the Inter-agency Task Force on Financing for Development, which is comprised of more than 60 United Nations Agencies and international organizations. The Financing for
Sustainable Development Office of the UN Department of Economic and Social Affairs serves as the substantive editor and
coordinator of the Task Force, in close cooperation with the World Bank Group, the IMF, World Trade Organization,
UNCTAD, UNDP and UNIDO. The Task Force was mandated by the Addis Ababa Action Agenda and is chaired by Li Junhua, United Nations Under-Secretary General for Economic and Social Affairs. The full copy of the report will be available
at https://financing.desa.un.org/fsdr2024 on 9 April 2024.The report forms the basis for discussions at the UN ECOSOC Forum on Financing for Development, where Member States discuss measures necessary to mobilize sustainable financing. Negotiations based on the report are
ongoing. The report also informs the SDG Investment Fair, a platform which brings together government officials and investors for sustainable investment opportunities that
support the achievement of the SDGs. It will also inform discussion at the UN’s Summit of the Future in September 2024.The report covers, among others, areas of the global economic context; debt; taxation; international development
cooperation; trade; private business and finance; technology; and global governance.